Fixed Deposit Calculator
A Fixed Deposit (FD), also called a term deposit, is one of the simplest and most reliable investment choices for conservative investors. You invest a lump sum for a fixed tenure at a guaranteed interest rate, and at maturity you receive the principal plus interest. Because returns are predictable and not tied to market movements, FDs are widely used to preserve capital, build short-to-medium-term savings, and generate steady interest income.
Topics of Discussion
How the Fixed Deposit Calculator Helps
A Fixed Deposit Calculator takes your input — principal (amount invested), annual interest rate, tenure, and compounding frequency — and instantly shows the maturity amount and total interest earned. Instead of manually applying formulas or guessing outcomes, the calculator gives you precise, comparable results so you can choose the tenure, frequency, or bank offering that fits your goals.
Key Terms
- Principal (P): The amount you deposit.
- Rate (r): Annual interest rate (in %).
- Tenure (t): Time period of FD, usually in years or months.
- Compounding frequency (n): How often interest is compounded each year (annually = 1, semi-annually = 2, quarterly = 4, monthly = 12).
- Maturity amount (A): Principal plus interest earned at the end of tenure.
Formula (Cumulative FD)
A = P × (1 + r/n)^(n × t)Where:
- A = maturity amount
- P = principal
- r = annual interest rate (decimal; e.g., 6.5% = 0.065)
- n = number of compounding periods per year
- t = tenure in years
Worked Example
Suppose you deposit ₹100,000 for 3 years at an annual interest rate of 6.5% compounded quarterly.
- Convert the annual rate to decimal: r = 6.5% = 0.065
- Quarterly compounding means n = 4
- Total periods = n × t = 4 × 3 = 12
- Interest per period = r / n = 0.065 / 4 = 0.01625
- Growth factor = (1 + 0.01625)12 ≈ 1.21340757896
- Maturity amount A = 100,000 × 1.21340757896 ≈ ₹121,340.76
- Total interest earned ≈ ₹21,340.76
How to Use the Fixed Deposit Calculator
- Enter Principal (amount you plan to invest).
- Enter Annual interest rate (in percent).
- Choose Tenure (years or months).
- Select Compounding frequency (monthly, quarterly, yearly).
- Click Calculate to get:
- Maturity amount (principal + interest)
- Total interest earned
- Amortization table if needed
When to Choose Cumulative vs Non-Cumulative FD
Cumulative FD: Best when you don’t need periodic income and want the highest possible maturity value (compounding advantage).
Non-cumulative FD: Best for retirees or those who need a regular interest payout (monthly/quarterly/annual).
Tips to Maximize FD Returns
- Compare rates across banks and NBFCs, but balance higher returns with safety.
- Choose non-cumulative FDs if you need regular income.
- Use FD laddering to reduce reinvestment risk and improve liquidity.
- Check for senior-citizen rates for higher interest if you’re eligible.
- Plan for tax implications — FD interest is taxable.
Pros & Cons
| Pros | Cons |
|---|---|
| Guaranteed returns: Your returns are fixed and secured for the duration of the deposit. | Inflation risk: Inflation can reduce the real value of your returns over time. |
| Low risk: The capital is protected, and deposits are often insured up to a certain limit. | Limited liquidity: Prematurely withdrawing funds can result in a penalty. |
| Higher interest than savings accounts. | Lower returns compared to market-linked investments. |
| You can take a loan against FD for liquidity without breaking it. | Interest is taxable as per your income slab. |
Fixed Deposit Calculator — FAQ
Q: What inputs do I need for the FD calculator?
A: You need the principal (amount you deposit), annual interest rate (percent), tenure (years or months), and compounding frequency (annually, semi-annually, quarterly, monthly).
Q: What’s the difference between cumulative and non-cumulative FD?
A: In a cumulative FD, interest compounds and is paid with the principal at maturity. In a non-cumulative FD, interest is paid out periodically (monthly/quarterly/annual), providing a steady cash flow.
Q: How does compounding frequency affect returns?
A: More frequent compounding (monthly > quarterly > annually) increases effective returns because interest is calculated and added to the principal more often.
Q: Can I withdraw an FD before maturity?
A: Yes, most banks allow premature withdrawal but usually charge a penalty and may adjust the interest rate. Check your bank’s premature withdrawal terms before depositing.
Q: Are fixed deposits safe?
A: Bank FDs are low-risk and often insured up to a limit by deposit insurance schemes (check local rules). NBFC/corporate FDs may offer higher rates but can carry higher risk.
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Read More →Disclaimer:
This Fixed Deposit Calculator provides estimates for informational purposes only. Calculations are based on the inputs you provide and common compound interest formulas. Actual returns may vary based on bank-specific conventions, tax laws, TDS, premature withdrawal penalties, and rounding differences. This content does not constitute financial advice. Consult your bank or a certified financial advisor for personalised guidance.